The UK pension industry has welcomed the Department for Work and Pensions' (DWP) proposals for "reinvigorating" occupational pension schemes, but called for the government not to be distracted from ensuring members of defined contribution (DC) schemes are offered the best value for money.
Responding to the department's paper, 'Reinvigorating workplace pensions', the National Association of Pension Funds' (NAPF) chief executive Joanne Segars warned that the idea of defined ambition would not be for everyone, especially at a time when many were being auto-enrolled into existing funds.
The pensions minister Steve Webb however said that auto-enrolment was only the start – it was now his goal to ensure people were saving into "high-quality, value-for-money pension funds". "Now is the time to reinvigorate workplace pensions, if we simply stand by as too many previous governments have, another generation could miss the chance to put something by for their old age.”
The coalition government's consultation touched on a number of issues relevant to the industry as a whole – from governance, through scale of funds to the possibility of introducing risk-sharing without forcing fully-fledged defined benefit (DB) on companies.
Morten Nilsson, chief executive of Now: Pensions, added that there was a need to create a savings culture in the UK, but dismissed out of hand any attempt to re-impose liabilities on employers. "Employers don't want liabilities, so it is not only cost[s] that need to be considered for quality", he argued.
Eversheds law firm meanwhile commended Webb for "throwing down the gauntlet". The company's head of pensions Anthony Arter said: "The paper contains some radical ideas for how things could be done differently and I hope that it leads to concrete changes being introduced".
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